Can you retire with $1 million dollars?

$1 million is a lot of money.

I don’t have $1 million dollars.

The median Singapore household has $1,755,000 in net wealth.

This includes a hefty dose of property in that value, so we can strip that away.

We’d prefer to retire with a roof over our heads.

With that being said, how much does this $1,000,000 get you in retirement?

Some assumptions have to be made

To simplify this question, we will assume the following.

1. We maximise CPF Life
2. We have a medium risk tolerance.
3. We are well-behaved investors who don’t panic and don’t fall prey to scams.

Now all of these are decisions that can be changed, so don’t take them as hard and fast rules.

Instead, think of them as reasonable decisions an average person could make.

Perhaps point 3 is wishful thinking. But if we don’t assume this, then no plan can succeed anyway.

Maximise CPF Life

CPF Life is an annuity.

It pays you a fixed amount of income for life.

This is exactly what a retiree needs.

Stable income that will last as long as you do.

We do not know our expiration dates.

A source of income that can cover for that ensures that we will never fall below a certain income.

In 2026, that income level is about $3440 a month.

That assumes we put in the ERS of $440,800.

It provides a safe source of income that will cover our daily needs.

And it leaves us with a remainder of $559,200.

That gets us…

A stock/bond portfolio for the rest of our income

We turn to one of my absolute favourite websites.

TPAW Planner helps you calculate the distribution of outcomes for a certain portfolio allocation.

It can even show you a good, average, and poor outcome.

We will simplify and take the average outcome.

For a person with a regular average risk tolerance at age 65, we will allocate 42% of our money into stocks and 58% of our money into bonds.

This decreases with age until a final ratio of 25:75 at age 95.

We assume that we expire at age 95 for our calculations.

And this gets us…

Your Monthly Spending Power

$4,535 / month at the beginning of retirement, and

$5,628 / month at the end of your retirement.

These numbers are adjusted for inflation, too.

So you get more money as you age, even though your portfolio risk is decreasing.

When I ran the numbers, I was quite surprised.

I didn’t expect anything close to this.

Remember, if we just divided $1,000,000 by 30 years, we would get $2,777 a month.

And that doesn’t increase with inflation.

We doubled our monthly spending by being smart about our retirement.

A comfortable retirement is well within reach.

You just need to stay the course.